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1 Overseas Investments in Agriculture and Food from a Food Industry Standpoint Takeshi Kimura, PhD. Member of the Board and Corporate Vice President Research and Development Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop on Food Security 2013

Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

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Page 1: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

1

Overseas Investments in Agriculture and Food

from a Food Industry Standpoint

Takeshi Kimura, PhD.

Member of the Board and Corporate Vice President

Research and Development

Ajinomoto, Co., Inc.

Tokyo, Japan

APEC Workshop on Food Security 2013

Page 2: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

About Ajinomoto: Origins

Dr. Kikunae Ikeda Discovered Amino Acid (Glutamate) was key

to Taste of Traditional Japanese Soup Stock

made from Konbu(Seaweed).

Claimed this was new basic taste and named

it Umami.

Patent for New Seasoning.

Now Scientifically Accepted as a Basic Taste

(Sweet, Sour, Salty, Bitter, Umami)

Mr. Saburosuke Suzuki Had Iodine business.

Iodine extracted from Konbu.

First to market monosodium

glutamate as seasoning

product.

Started business with Umami in 1909

“Create technology and establish business”

Page 3: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

About Ajinomoto: Product Tree

Page 4: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

4

About Ajinomoto

Page 5: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Overseas Business

5

Domestic Overseas (Incl. non-food)

Consolidated

Sales 7,649 4,075 11,724

65% 35% 100%

Operating Profit

343 369 712

48% 52% 100%

(100 M¥) <March 2013>

Overseas Business 35% of Total Sales, 52% of Operating Profit

Page 6: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

6

Breakdown of Overseas Business

60% of Overseas Business is in the food sector, of which 80% is

in the consumer foods sector (for households and restaurants)

海外食品 その他

Consumer Products

Ingredients

<March 2013>

(Household & Restaurant)

(for foods industry)

17% of Ajinomoto Group

約60%

約80%

【Overseas Business】 【Overseas Food】

Others Food

~80%

Page 7: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Overseas Business: Breakdown by Products, Area

7

製品別では調味料が74%、地域別ではアジアが77%を占める。 Aji-no-moto

Seasoning

Asia Other

Seasonings

Beverage

>10% Growth

Processed Foods

Instant Noodles,

Powdered Beverages

>10% Growth

Flavor Seasonings

>10% Growth in

Major Markets

Others

Europe

Africa

South

America

North America

FY2012

199 Billion ¥ FY2012

199 Billion ¥

Page 8: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

0

50

100

150

200

250

300

350

400

売上高

0

100

200

300

400

500

600

営業利益

Index: 2003 = 100

366

549

8

Growth of Overseas Food Business (2003~2013)

Sales Operating Profit

Page 9: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

9

History of Overseas Consumer Foods

(1)Pre WW2:Export of Umami Seasonings Bulk Export, Repackage Abroad

(2)1960~1980s:Start of Overseas Business Local Production(Fermentation Process)(1961)

Establishment of distribution model (Philippines)

Applied to other countries

(3)1980~2000:Expansion of Seasonings Expansion of Business to Flavor Seasonings

• Thailand 「Ros Dee」、Indonesia 「Masako」

• Philippines 「GINISA」、Brazil 「Sazon」 など

(4)After late1980s:Processed Foods Expansion og Processed Food Business

First Pot WWI Export (1947)

Thai Factory 1960)

Page 10: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Flavor Seasonings

Beverages Instant Noodles

Soup

Menu Seasonings

Frozen Foods

France USA

Hong Kong

10

“Aji-no-moto”

“Aji-no-moto”

Our Basic Business Model

Industrial

Retail Expanding Area

Liquid Seasonings

Dry Seasonings

Increasing

Value

Page 11: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Types of Overseas Agricultural Investment

11

1. Food and Food ingredient plants in various countries Supply local markets and export globally

Overseas Investment for Plants and Subsidiaries

Large Scale Fermentation Plants

Food Processing Plants

Mainly use locally sourced raw material

2. Import for Japanese Market Raw Materials and Products

Managed farms in various countries

Sourcing from North and South Hemispheres

Page 12: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop
Page 13: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

APEC Region(ex Jpn)

30 Food Plants

8 Amino Acid Plants

Page 14: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Overseas Plants

14

Amino Acid Fermentation Plants in Brazil Food Processing Plants in Thailand

Page 15: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

World Product Map

Page 16: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

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Products Developed to Local Taste

フィリピン タイ インドネシア マレーシア ベトナム

"GINISA" "Ros Dee" "Masako" "TUMIX" "Aji-ngon"(炒める) (味が良い) (料理する) (料理の前処理) (美味しい)

オニオンとガーリックを 肉のエキスとスパイスを 肉のエキスとスパイスを 鶏のエキスとスパイスを 豚の大腿骨と肉をバランスよくブレンドした バランスよくブレンドした バランスよくブレンドし、 バランスよくブレンドし、 煮出したベトナム人のフィリピン料理用、炒め タイ料理で大事な香りと スープから炒め物まで スープから炒め物まで ためのだし調味料調味料 味が絶妙なバランスの、 美味しく仕上げる万能 美味しく仕上げる万能

万能調味料 調味料 調味料

インドネシア タイ フィリピン ベトナム ブラジル「Masako」 「ROSDEE」 「GINISA」 「Aji-ngon」 「Sazon」

和訳 (料理する) 和訳 (味が良い)タガログ語のGISAが語源

炒めるの意和訳 (美味しい)

スペイン語(sazonar)が語源味を付けるの意

肉のエキスとスパイスをバランスよくブレンド゙し,スープから炒め物まで美味しく仕上げる万能調味料

肉のエキスとスパイスをバランスよくブレンドしたタイ料理で大事な香りと味が絶妙な バランスの万能調味料

ガーリックとオニオンをバランスよくブレンドした、フィリピン料理用、炒め調味料

豚の大腿骨と肉を煮出したベトナム人のためのだし調味料

天然の香辛料に各種調味料を理想的なバランスで配合した粉末の混合調味料です。

Philippines Thailand Indonesia Malaysia Vietnam

Developed Locally. Manufactured Locally

Page 17: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Branch Office 3 Sales Office 49 Distribution Centers 133 Total Sales Points 185 Distributors 35

Total Sales Force

1,753

Extensive Sales Network <eg. Indonesia>

17

Page 18: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Selecting Countries for Plant Investment

18

1. Demographics

Population Size and Growth

2. Raw Materials

Availability of Agricultural Products

For Fermentation Need Lots of Carbohydrates (Sugar cane, Sugar Beet, Tapioca, Corn)

3. Infrastructure

Stable supply of Water, Electricity, Fuel

Transportation Infrastructure

Page 19: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Importing Food Ingredients

Main Ingredients Country of Origin

Pork Canada, USA, Japan

Chicken USA, Brazil

Cabbage Japan, China

Onion China, USA, Japan, Australia

Leek China

Garlick China

From http://www.ffa.ajinomoto.com/

Main ingredients for frozen foods disclosed via internet.

Top selling frozen dumplings

Page 20: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Importing Foods: Farms managed by Ajinomoto Frozen Foods

20

CHINA: Vegetables USA: Vegetables

CANADA: Pork

USA: Pork

USA: Chicken

AUSTRALIA &

NEW ZEALAND: Beef

AUSTRALIA: Vegetables

THAILAND:

Chicken, Pork, Beef, Prawn

Page 21: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Import of Products and Raw materials for Ajinomoto

and Ajinomoto Frozen Foods

21

Import(Mt)

Ajinomoto

Product -Raw Material 5,300

FFA

Product 7,800

Raw Material 5,800

China

Import(Mt)

Ajinomoto

Product -Raw Material 2,900

FFA

Product -Raw Material 160

Europe

Import(Mt)

Ajinomoto

Product 2,100

Raw Material 2,500

FFA

Product 23,300

Raw Material 6,800

Asia (excluding China)

Import(Mt)

Ajinomoto

Product -Raw Material 130

FFA

Product -Raw Material 1,600

Australia, N.Z.

Import(Mt)

Ajinomoto

Product -Raw Material 5,500

FFA

Product -Raw Material 1,500

North America

Import(Mt)

Ajinomoto

Product -Raw Material 100

FFA

Product -Raw Material 1,600

South America

Total: 67,000 Tons

Page 22: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Raw Material Supplier Selection <eg. China>

22

Primary Material Processing

Review and determination of

raw material standards Product Design and

Development

Pesticide

Testing

Cultivation

Management

Soil

Analysis

Confirmation

of pesticides

used

Feeding

Management

Animal drug

Testing

Feeding

Management

Animal drug

Testing

Confirmation of

animal drugs used

<Beef>

Use of raw

materials

produced in non-

BSE contaminated

countries

Confirmation of

animal drugs used

◆Management point

・Our company and raw material suppliers share

awareness of the significance of process

management that starts from cultivation.

・Our company confirms on a regular basis that

raw material suppliers manage their processes.

Raw Materials

Vegetables Seafood (shrimp) Meat

Inspections

Selection of raw material suppliers and Submission of

quality guarantee ●Retention and Management of raw material

suppliers

● Selection of raw material suppliers

⇒Residual pesticide

testing is implemented

to verify the process

management. P7

Page 23: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

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Use of Biomass Energy

Introduction of Biomass Boilers

We have introduced biomass boilers, in each region.

using biogas

generated from the

process of producing

amino acid

In Thailand using rice husks as fuel

Advanced Bio-cycle Launched at the Laranjal Paulista Plant In Brazil

using bagasse as fuel

Page 24: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

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Spreading Environmentally Friendly Livestock Farming

Feed-use Amino Acids

-

30% N2O

reduction Effect

330,000 tons of lysine of the Ajinomoto Group

↓ Equivalent to

approx. 800,000 tons of CO2 reduction = equivalent effect to

tree planting in123,000 ha (23 special districts of Tokyo x 2)

Page 25: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

Approx. 1.2 million tons of world’s consumption of lysine

= saves approx. 14 million ha of arable land (roughly a half of soybean land in the US or twice of arable land for overall agricultural products in Japan)

Feed-use amino acid contributes to

the effective use of feed and to the growth of livestock.

50 tons of soybean meal out of 1,000 tons of general feed can be replaced with

48.5 tons of corn + 1.5 tons of lysine.

Arable land necessary to 50 tons of

soybean meal production Arable land needed for

48.5 tons of corn production

Land necessary for the production of raw material

for 1.5 tons of lysine

25

More Efficient Use of Farmland

Feed-use Amino Acid Approx.

- 70% Saving land

approx. 70% of arable land

Page 26: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

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Nurturing Marine Resources

Environmental Vitalizing Concrete

in 21 water area across Japan

5~10×

faster microalgae growth

Believing that amino acids can help vitalize water sources, we began

conducting research to develop concrete containing amino acids.

Page 27: Overseas Investments in Agriculture and Food from a Food ...apip-apec.maff.go.jp/multi/plan/2013/11/15/files/3-3.pdf2013/11/15  · Ajinomoto, Co., Inc. Tokyo, Japan APEC Workshop

27

Thank You Very Much

For Your Attention